**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549




**FORM
      10-Q**




**xQUARTERLY
      REPORT UNDER
      SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACTOF 1934**




For
      the
      quarterly period ended: August 31, 2007




OR




**oTRANSITION
      REPORT UNDER
      SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934**




For
      the
      transition period from ________________ to ________________




*Commission
      File No. 0-26057*




**BIOPHAN
      TECHNOLOGIES, INC.**


(Exact
      name of registrant as specified in its charter)





Nevada
            82-0507874(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                Employer Identification No.)





15
      Schoen
      Place


Pittsford,
      New York 14534


(Address
      of principal executive offices) (Zip Code)




(585)
      267-4800


(Registrant's
      telephone number, including area code)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.




Yes
xNo
o




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer. See definition of "accelerated
      filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
      one).




**Large
      Accelerated Filer**o**Accelerated
      Filer**x**Non-Accelerated
      Filer**o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).




Yes
oNo
x




Indicate
      the number of shares outstanding of each of the issuer's classes of common
      equity, as of the latest practicable date.




Class
      outstanding as of October 8, 2007 - Common Stock, $.005 par value: 96,829,607
      shares





**INDEX**




**PART
      I. FINANCIAL INFORMATION**





ITEM
                1. Financial StatementsCondensed
                Consolidated Balance Sheets, August 31, 2007 (Unaudited) and February
                28,
                2007
            1Condensed
                Consolidated Statements of Operations, Three Months and Six Months
                Ended
                August 31, 2007 and 2006 (Unaudited), and from August 1, 1968 (Date
                of
                Inception) through August 31, 2007 (Unaudited)
            2Condensed
                Consolidated Statements of Cash Flows, Six Months Ended August 31,
                2007 and 2006 (Unaudited), and from August 1, 1968 (Date of Inception)
                through August 31, 2007 (Unaudited)
            3Notes
                to Condensed Consolidated Financial Statements
            6ITEM
                2. Management's Discussion and Analysis of Financial Condition and
                Results
                of Operations
            14ITEM
                3. Quantitative and Qualitative Disclosures About Market Risk
            17ITEM
                4. Controls and Procedures
            17PART
                II. OTHER INFORMATIONITEM
                1. Legal Proceedings
            17ITEM
                1A. Risk Factors
            18ITEM
                2. Unregistered Sales of Equity Securities and Use of Proceeds
            18ITEM
                3. Defaults Upon Senior Securities
            18ITEM
                4. Submission of Matters to a Vote of Security Holders
            18ITEM
                5. Other Information
            18ITEM
                6. Exhibits
            18SIGNATURES
            19





**PART
      I. FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**




**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED BALANCE SHEETS**





August 31,
              2007
            
            February 28,
              2007(Unaudited)ASSETSCurrent
                assets:Cash
                and cash equivalents
            
            $
            268,716
            
            $
            2,418,551Accounts
                receivable
            
            
            40,325
            
            
            21,448Prepaid
                expenses
            
            
            197,344
            
            
            166,171Other
                current assets
            
            
            46,384
            
            
            25,350Total
                current assets
            
            
            552,769
            
            
            2,631,520Property
                and equipment, net
            
            
            369,322
            
            
            418,362Other
                assets:Intangible
                assets, net of amortizationMyotech,
                LLC
            
            
            22,385,252
            
            
            23,074,028Other
            
            
            1,275,531
            
            
            1,322,777Deferred
                financing costs, net of amortization of $434,816 and $186,350,
                respectively
            
            
            1,097,394
            
            
            1,345,860Investment
                in New Scale Technologies, Inc.
            
            
            100,000
            
            
            100,000Deposits
            
            
            206
            
            
            3,704Deferred
                tax asset, net of valuation allowance of $14,350,000 and $12,784,000
                respectively
            
            
            —
            
            
            —24,858,383
            
            
            25,846,369$
            25,780,474
            
            $
            28,896,251LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIENCY)Current
                liabilities:Current
                portion of capital lease obligation
            
            $
            14,680
            
            $
            7,445Current
                portion of senior secured convertible notes, net of discount of $1,671,612
                and $2,183,580, respectively
            
            
            1,090,294
            
            
            672,481Accounts
                payable and accrued expenses
            
            
            1,965,020
            
            
            1,942,033Liquidated
                damages payable
            
            
            652,500
            
            
            —Note
                payable
            
            
            57,969
            
            
            78,007Line
                of credit - related party
            
            
            2,250,000
            
            
            4,430,000Due
                to related parties
            
            
            62,894
            
            
            80,280Deferred
                revenues
            
            
            583,333
            
            
            208,333Total
                current liabilities
            
            
            6,676,690
            
            
            7,418,579Long-term
                debt:Capital
                lease obligation
            
            
            15,534
            
            
            19,604Senior
                secured convertible notes payable, less discount of $1,960,351 and
                $3,359,354, respectively
            
            
            1,278,621
            
            
            1,034,585Fair
                value of warrant liability
            
            
            —
            
            
            10,494,006Total
                liabilities
            
            
            7,970,845
            
            
            18,966,774Minority
                interest
            
            
            12,367,582
            
            
            13,139,882Stockholders'
                equity (deficiency):Common
                stock $.005 par value
              Authorized,
                250,000,000 and 125,000,000 shares,
              respectively
              Issued,
                98,375,689 and 83,431,699 shares,
              respectively
            
            
            491,878
            
            
            417,158Additional
                paid-in capital
            
            
            66,841,444
            
            
            54,532,20467,333,322
            
            
            54,949,362Less
                treasury stock, 4,923,080 shares
            
            
            (8,467,698
            )
            
            (8,467,698
            )58,865,624
            
            
            46,481,664Deficit
                accumulated during the development stage
            
            
            (53,423,577
            )
            
            (49,692,069
            )Total
                stockholders' equity (deficiency)
            
            
            5,442,047
            
            
            (3,210,405
            )$
            25,780,474
            
            $
            28,896,251




**See
      Notes to Condensed Consolidated Financial Statements**


1





**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


(UNAUDITED)





Period fromAugust 1, 1968Three Months Ended
            
            Six Months Ended
            
            (date ofAugust 31,
            
            August 31,
            
            inception) to2007
            
            2006
            
            2007
            
            2006
            
            August 31, 2007Revenues:Development
                payments
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            300,000License
                fees
            
            
            62,500
            
            
            187,500
            
            
            125,000
            
            
            437,500
            
            
            1,166,666Grant
                revenues
            
            
            25,000
            
            
            —
            
            
            75,000
            
            
            —
            
            
            75,000Consulting
                fees
            
            
            72,518
            
            
            122,599
            
            
            132,351
            
            
            217,521
            
            
            900,075160,018
            
            
            310,099
            
            
            332,351
            
            
            655,021
            
            
            2,441,741Operating
                expenses:Research
                and development
            
            
            1,497,837
            
            
            1,941,513
            
            
            2,817,784
            
            
            4,529,921
            
            
            23,028,177General
                and administrative
            
            
            1,802,753
            
            
            1,573,434
            
            
            3,290,423
            
            
            3,659,625
            
            
            28,056,740Write-down
                of intellectual property rights
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            530,0003,300,590
            
            
            3,514,947
            
            
            6,108,207
            
            
            8,189,546
            
            
            51,614,917Operating
                loss
            
            
            (3,140,572
            )
            
            (3,204,848
            )
            
            (5,775,856
            )
            
            (7,534,525
            )
            
            (49,173,176
            )Other
                income(expense):Interest
                income
            
            
            4,990
            
            
            5,263
            
            
            20,431
            
            
            11,606
            
            
            231,803Interest
                expense
            
            
            (1,234,622
            )
            
            (380,934
            )
            
            (1,714,326
            )
            
            (684,407
            )
            
            (9,794,855
            )Additional
                expense related to warrants
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (7,304,105
            )Change
                in fair value of warrant liability
            
            
            —
            
            
            —
            
            
            3,434,017
            
            
            —
            
            
            9,657,278Loss
                on extinguishment of debt - Related party
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (670,053
            )Debt
                forgiveness
            
            
            197,614
            
            
            —
            
            
            197,614
            
            
            —
            
            
            197,614Liquidated
                damages
            
            
            —
            
            
            —
            
            
            (652,500
            )
            
            —
            
            
            (652,500
            )Other
                income
            
            
            5,763
            
            
            46,163
            
            
            33,939
            
            
            93,701
            
            
            887,331Other
                expense
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (70,528
            )(1,026,255
            )
            
            (329,508
            )
            
            1,319,175
            
            
            (579,100
            )
            
            (7,518,015
            )Loss
                from continuing operations before minority interest in Myotech,
                LLC
            
            
            (4,166,827
            )
            
            (3,534,356
            )
            
            (4,456,681
            )
            
            (8,113,625
            )
            
            (56,691,191
            )Minority
                interest in Myotech, LLC
            
            
            253,354
            
            
            520,095
            
            
            725,173
            
            
            1,215,920
            
            
            3,356,971Loss
                from continuing operations
            
            
            (3,913,473
            )
            
            (3,041,261
            )
            
            (3,731,508
            )
            
            (6,897,705
            )
            
            (53,334,220
            )Loss
                from discontinued operations
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (89,357
            )Net
                loss
            
            $
            (3,913,473
            )
            $
            (3,041,261
            )
            $
            (3,731,508
            )
            $
            (6,897,705
            )
            $
            (53,423,577
            )Net
                loss per common share:Basic
                and diluted
            
            $
            (0.047
            )
            $
            (0.040
            )
            $
            (0.046
            )
            $
            (0.090
            )Weighted
                average shares outstanding
            
            
            83,827,197
            
            
            77,893,673
            
            
            81,167,908
            
            
            77,393,718




**See
      Notes to Condensed Consolidated Financial Statements**


2


**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


(Unaudited)





Period fromAugust 1, 1968Six Months Ended
            
            (date ofAugust 31,
            
            inception) to2007
            
            2006
            
            August 31, 2007Cash
                flows used for operating activities:Net
                income (loss)
            
            $
            (3,731,508
            )
            $
            (6,897,705
            )
            $
            (53,423,577
            )Adjustments
                to reconcile net income (loss) to net cash used in operating
                activities:Amortization
                of intangible assets
            
            
            736,022
            
            
            729,022
            
            
            2,599,508Amortization
                of deferred financing costs
            
            
            248,466
            
            
            —
            
            
            434,816Depreciation
                and amortization
            
            
            60,618
            
            
            31,194
            
            
            295,420(Gain)
                loss on disposal of equipment
            
            
            —
            
            
            1,162
            
            
            10,599Additional
                expenses related to warrants
            
            
            —
            
            
            —
            
            
            7,304,105Change
                in fair value of derivative liability
            
            
            (4,339,214
            )
            
            —
            
            
            (9,657,278
            )Realized
                and unrealized losses on marketable securities
            
            
            —
            
            
            —
            
            
            66,948Loss
                on debt extinguishment - related party
            
            
            —
            
            
            —
            
            
            670,053Accrued
                interest on note converted to common stock
            
            
            736,138
            
            
            —
            
            
            767,642Amortization
                of discount on convertible notes payable
            
            
            1,910,971
            
            
            —
            
            
            4,668,987Write-down
                of intellectual property rights
            
            
            —
            
            
            —
            
            
            530,000Amortization
                of discount on payable to related party
            
            
            —
            
            
            498,424
            
            
            2,887,555Issuance
                of common stock for services
            
            
            79,229
            
            
            —
            
            
            486,177Issuance
                of common stock for interest
            
            
            —
            
            
            —
            
            
            468,823Grant
                of stock options for services
            
            
            1,944,630
            
            
            839,096
            
            
            9,952,988Expenses
                paid by stockholder
            
            
            —
            
            
            —
            
            
            2,640Minority
                interest
            
            
            (772,301
            )
            
            (1,260,002
            )
            
            (3,358,144
            )Changes
                in operating assets and liabilities:(Increase)
                decrease in accounts receivable
            
            
            (18,877
            )
            
            103,139
            
            
            (32,825
            )(Increase)
                decrease in due from related parties
            
            
            —
            
            
            (40,080
            )
            
            (59,300
            )(Increase)
                decrease in prepaid expenses
            
            
            (31,173
            )
            
            6,739
            
            
            (197,344
            )(Increase)
                decrease in other current assets
            
            
            (21,034
            )
            
            26,736
            
            
            (5,046
            )(Increase)
                decrease in deposits
            
            
            3,498
            
            
            —
            
            
            2,043Increase
                (decrease) in accounts payable and accrued expenses
            
            
            22,988
            
            
            874,266
            
            
            1,405,015Increase
                (decrease) in liquidated damages
            
            
            652,500
            
            
            —
            
            
            652,500Increase
                (decrease) in due to related parties
            
            
            (17,386
            )
            
            (25,824
            )
            
            19,398Increase
                (decrease) in deferred revenues
            
            
            375,000
            
            
            (437,500
            )
            
            583,333Net
                cash used in operating activities
            
            
            (2,161,433
            )
            
            (5,551,333
            )
            
            (32,924,964
            )Cash
                flows used for investing activities:Purchases
                of property and equipment
            
            
            (4,392
            )
            
            (91,366
            )
            
            (609,036
            )Sales
                of marketable securities
            
            
            —
            
            
            —
            
            
            2,369,270Purchase
                of investment
            
            
            —
            
            
            —
            
            
            (100,000
            )Acquisition
                costs of intangible assets
            
            
            —
            
            
            —
            
            
            (466,583
            )Cash
                paid for investment in Myotech, net of cash received of
                $19,408
            
            
            —
            
            
            —
            
            
            (280,594
            )Cash
                paid for acquisition of Biophan Europe, net of cash received of
                $107,956
            
            
            —
            
            
            —
            
            
            (258,874
            )Purchases
                of marketable securities
            
            
            —
            
            
            —
            
            
            (2,436,218
            )Net
                cash used in investing activities
            
            
            (4,392
            )
            
            (91,366
            )
            
            (1,782,035
            )





**See
      Notes to Condensed Consolidated Financial Statements.**


3


**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


(Unaudited)





Period fromAugust 1, 1968Six Months Ended
            
            (date ofAugust 31,
            
            inception) to2007
            
            2006
            
            August 31, 2007Cash
                flows provided by financing activities:Proceeds
                of bridge loans
            
            
            —
            
            
            —
            
            
            986,500Loan
                from stockholder
            
            
            —
            
            
            —
            
            
            143,570Line
                of credit borrowing from related party
            
            
            —
            
            
            3,630,000
            
            
            7,980,950Line
                of credit payments
            
            
            —
            
            
            (2,000,000
            )
            
            (2,072,500
            )Proceeds
                of convertible notes payable
            
            
            —
            
            
            —
            
            
            7,250,000Notes
                payable
            
            
            (20,038
            )
            
            58,748
            
            
            (142,031
            )Principal
                payments on capital lease obligation
            
            
            (4,021
            )
            
            —
            
            
            (4,021
            )Proceeds
                from sales of common stock
            
            
            40,049
            
            
            3,050,000
            
            
            19,478,898Exercise
                of options
            
            
            —
            
            
            8,678
            
            
            658,467Exercise
                of warrants
            
            
            —
            
            
            —
            
            
            1,142,451Swing
                profits
            
            
            —
            
            
            —
            
            
            696,087Deferred
                financing costs
            
            
            —
            
            
            —
            
            
            (1,030,120
            )Deferred
                equity placement costs
            
            
            —
            
            
            —
            
            
            (112,536
            )Net
                cash provided by financing activities
            
            
            15,990
            
            
            4,747,426
            
            
            34,975,715Net
                increase(decrease) in cash and equivalents
            
            
            (2,149,835
            )
            
            (895,273
            )
            
            268,716Cash
                and equivalents, beginning
            
            
            2,418,551
            
            
            1,477,716
            
            
            —Cash
                and equivalents, ending
            
            $
            268,716
            
            $
            582,443
            
            $
            268,716Supplemental
                schedule for cash paid for:Interest
            
            $
            2,558
            
            
            30,000
            
            $
            207,439Supplemental
                schedule of non cash investing and financing activities:Allocation
                of proceeds from line of credit - related party to beneficial conversion
                feature and warrants
            
            $
            —
            
            $
            272,945
            
            $
            2,812,555Allocation
                of proceeds from notes and warrants
            
            $
            —
            
            $
            —
            
            $
            7,250,000Change
                in fair value of warrants reclassified from equity to warrants
                liability
            
            $
            —
            
            $
            —
            
            $
            755,876Reclassification
                of warrants from warrant liability to equity
            
            $
            5,964,729
            
            $
            —
            
            $
            5,964,729Capital
                lease obligation
            
            $
            6,318
            
            $
            —
            
            $
            33,367Issuance
                of common stock upon conversion of line of credit loans
            
            $
            2,180,000
            
            $
            —
            
            $
            4,158,450Issuance
                of common stock for payment of principal and interest on Senior Secured
                Notes payable
            
            $
            1,789,361
            
            $
            —
            
            $
            1,249,122Issuance
                of common stock for the acquisition of a 35% interest in Myotech,
                LLC
            
            $
            —
            
            $
            —
            
            $
            8,467,698Issuance
                of common stock in satisfaction of accounts payable
            
            $
            79,229
            
            $
            —
            
            $
            213,229Common
                stock issued for subscription receivable
            
            $
            —
            
            $
            —
            
            $
            —




**See
      Notes to Condensed Consolidated Financial Statements.**





4


**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


(Unaudited)





Period fromAugust 1, 1968Six Months Ended
            
            (date ofAugust 31,
            
            inception) to2007
            
            2006
            
            August 31, 2007Liabilities
                assumed in conjunction with acquisition of 51% interest inBiophan
                Europe and certain intellectual property rights:Fair
                value of assets acquired
            
            
            
            
            
            
            
            $
            1,105,714Cash
                paid
            
            
            
            
            
            
            
            
            (366,830
            )Promissory
                note issued
            
            
            
            
            
            
            
            
            (200,000
            )Restricted
                stock issued
            
            
            
            
            
            
            
            
            (134,000
            )Payables
                incurred
            
            
            
            
            
            
            
            
            (226,500
            )Liabilities
                assumed
            
            $
            —
            
            $
            —
            
            $
            178,384Issuance
                of common stock upon conversion of bridge loans
            
            $
            —
            
            $
            —
            
            $
            1,142,068Acquisition
                of intellectual property
            
            $
            —
            
            $
            —
            
            $
            425,000Intellectual
                property acquired through issuance of capital stock and assumption
                of
                related party payable
            
            $
            —
            
            $
            —
            
            $
            175,000





**See
      Notes to Condensed Consolidated Financial
      Statements.**


5


**BIOPHAN
      TECHNOLOGIES, INC. AND SUBSIDIARIES**


(A
      DEVELOPMENT STAGE COMPANY)




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**August
      31, 2007**




**INTERIM
      FINANCIAL STATEMENTS:**




The
      condensed consolidated financial statements as of August 31, 2007 and for the
      three and six months ended August 31, 2007 and 2006 are unaudited. However,
      in
      the opinion of management of the Company, these financial statements reflect
      all
      adjustments, consisting solely of normal recurring adjustments, necessary to
      present fairly the financial position and results of operations for such interim
      periods. The results of operations for the interim periods presented are not
      necessarily indicative of the results to be obtained for a full year. These
      unaudited condensed consolidated financial statements should be read in
      conjunction with the audited consolidated financial statements and notes thereto
      included in the Company's Annual Report on Form 10-K for the fiscal year ended
      February 28, 2007.




**BASIS
      OF CONSOLIDATION:**




The
      consolidated financial statements include the accounts of Biophan Technologies,
      Inc. ("Biophan"), its wholly owned subsidiaries, LTR Antisense Technology,
      Inc.("Antisense") and Nanolution Technologies, Inc., formerly MRIC Drug Delivery
      Systems, LLC, ("Nanolution"), its majority owned subsidiaries Biophan Europe
      GmbH ("Biophan Europe"), formerly aMRIs GmbH, and TE Bio LLC ("TE Bio"), and
      Myotech, LLC ("Myotech"), a variable interest entity, collectively referred
      to
      as the "Company". All significant inter-company accounts and transactions have
      been eliminated in consolidation.




**COMPANY
      HISTORY:**




The
      Company was incorporated under the laws of the State of Idaho on August 1,
      1968
      and on January 12, 2000, changed its domicile to Nevada by merging into a Nevada
      corporation, and on July 19, 2001, changed its name to Biophan Technologies,
      Inc. From the inception of the current line of business on December 1, 2000,
      the
      Company has not generated any material revenues and operating profits.
      Therefore, the Company is in the development stage and will remain so until
      the
      realization of significant revenues and operating profits. The Company's ability
      to continue in business is dependent upon maintaining sufficient financing
      or
      attaining future profitable operations.




**PRINCIPAL
      BUSINESS ACTIVITIES:**




The
      primary mission is to develop and commercially exploit technologies for
      improving the performance, and as a result, the competitiveness of biomedical
      devices manufactured by third party companies. The Company possesses
      technologies for enabling biomedical devices, both implantable and those used
      in
      diagnostic and interventional procedures, to be safe (do not harm the patient
      or
      physician) and image compatible (allow effective imaging of the device and
      its
      surrounding tissue) with MRI (magnetic resonance imaging). The Company is also
      developing and marketing a system for generating power for implantable devices
      from body heat, and a series of implantable devices including MRI-visible
      vascular implants such as a vena cava filter, a heart valve and an occluder
      for
      the treatment of atrial septal defects, a hole in the wall separating the left
      and right chambers of the heart. The Company's first licensee for several of
      these technologies is Boston Scientific (NYSE: BSX). The Company is also an
      owner of a substantial minority interest, with rights to take a majority
      interest, in Myotech,(accounted for as a variable interest entity) developer
      of
      the Myotech Circulatory Support System, a cardiac assist device that does not
      contact circulating blood and utilizes technology that has the potential to
      become a standard of care in the device market for treating multiple types
      of
      acute and chronic heart failure including congestive heart failure and sudden
      cardiac arrest.




**DEFERRED
      TAXES:**




Deferred
      tax assets and liabilities are recognized for future tax consequences
      attributable to differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax bases. Deferred tax
      assets and liabilities are measured using enacted rates expected to apply when
      the differences are expected to be realized. A valuation allowance is recognized
      if it is anticipated that some or all of the deferred tax asset may not be
      realized.




In
      June
      2006, the Financial Accounting Standards Board ("FASB") issued FASB
      Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
      interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the
      accounting for uncertainty in income taxes recognized in a company's financial
      statements in accordance with SFAS No. 109, "Accounting for Income Taxes."
      FIN
      48 prescribes a recognition threshold and measurement attribute for the
      financial statement recognition and measurement of a tax position taken or
      expected to be taken in a tax return. The Company adopted FIN 48 effective
      March
      1, 2007. The Company does not believe that FIN 48 had a material effect on
      its
      consolidated financial position or results of operations as the Company has
      no
      unrecognized tax benefits and has not incurred any interest or penalties in
      any
      of its tax jurisdictions. Should any such interest or penalties be assessed,
      they will be charged to interest expense and other expense as incurred. The
      Company has open tax years beginning in fiscal years ended year February 28,
      2004 through 2007. None of the Company's tax returns has been examined by
      federal or state jurisdictions during these periods.


6




**REGISTRATION
      RIGHTS AGREEMENT:**




In
      December 2006, the FASB issued Staff Position No. EITF 00-19-2 ("FSP"). This
      FSP
      addresses an issuer's accounting for registration payment arrangements and
      specifies that the contingent obligation to make future payments or otherwise
      transfer consideration under a registration payment arrangement should be
      separately recognized and measured in accordance with FASB No. 5. The guidance
      in this FSP amends FASB Statements 133 and 150 and FASB Interpretation No.
      45 to
      include scope exceptions for registration payment arrangements. This FSP further
      clarifies that a financial instrument subject to a registration payment
      arrangement should be accounted for without regard to the contingent obligation
      to transfer consideration pursuant to the registration payment arrangement.
      This
      guidance is effective for financial statements issued for fiscal years beginning
      after December 15, 2006. The Company has adopted this FSP in the current fiscal
      year as it pertains to the issuance of the Senior Secured Convertible Notes
      and
      related warrants as explained in the Note captioned "Senior Secured Convertible
      Notes".




**RECENT
      ACCOUNTING PRONOUNCEMENTS:**





Management
      does not believe that any recently issued, but not yet effective accounting
      standards, if currently adopted, would have a material effect on the
      accompanying financial statements.




**INVESTMENT
      IN MYOTECH, LLC:**




Effective
      November 30, 2005, we entered into a Securities Purchase Agreement for the
      acquisition of an initial 35% interest in Myotech, LLC ("Myotech"), a New York
      limited liability company, whereby we exchanged 4,923,080 shares of our common
      stock, par value $.005, for 3,768,488 Class A (voting) units of
      Myotech.




Based
      upon the terms of the Securities Purchase Agreement, we were obligated to
      purchase for cash consideration of $2.225 million an additional 811,037 Class
      A
      units. We may elect to acquire up to an additional 3,563,097 Class A units
      for
      further cash consideration of up to $9.775 million, over a 24-month period,
      which may result in the Company owning a majority interest in Myotech. During
      the three month period ended February 28, 2006, Biophan provided $1,185,000
      of
      additional funding for 431,946 newly issued Class A units of Myotech. During
      the
      year ended February 28, 2007, Biophan has provided $1,040,000 of additional
      funding satisfying the cash consideration of $2.225 million cited above, for
      379,091 newly issued Class A units of Myotech. In addition, Biophan has also
      provided an additional investment of $1,994,349 to Myotech against milestone
      2
      in the year ended February 28, 2007 for 726,963 newly issued Class A units,
      which increased our ownership to 43.7%. Additional investments of $395,685
      were
      made during the six months ended August 31, 2007 for 144,232 additional newly
      issued Class A units, which raised our ownership percentage to
      44.1%.




We
      have
      determined that Myotech is a Variable Interest Entity within the meaning of
      FIN
      46(R) and that we are the primary beneficiary (as defined in FIN 46(R)).
      Consequently, the financial statements of Myotech have been consolidated with
      our consolidated financial statements for all periods ending on or after
      November 30, 2005, the date of our initial investment in Myotech.




On
      October 2, 2007, we entered into a revised Securities Purchase Agreement with
      Myotech pursuant to which the Company agreed to purchase from Myotech an
      aggregate of 15,496,547 membership units for an aggregate purchase price of
      $3,200,000. Prior to the execution of the Agreement Biophan owned 5,408,194
      Class A Membership Units of Myotech. In accordance with the Agreement, upon
      execution of the Agreement Biophan received 5,000,000 Class A Membership Units
      and was to receive an addition 4,316,547 Class A Membership Units upon the
      payment of an aggregate initial purchase price of $1,200,000. Thereafter, upon
      the satisfaction of certain conditions, Biophan will purchase an additional
      6,180,000 Class A Membership Units of Myotech for a purchase price of
      $2,000,000. As a result of these investments, our ownership percentage in
      Myotech will increase to approximately 75%.




7


The
      following is selected financial data for Myotech, LLC at August 31, 2007 and
      2006 and for the six months then ended August 31:





2007
            
            2006Total
                current assets
            
            
            11,443
            
            $
            18,719Intangible
                assets, net of amortization
            
            
            22,385,252
            
            
            23,762,804Other
                assets
            
            
            155,687
            
            
            47,819Total
                assets
            
            $
            22,552,382
            
            $
            23,829,342Current
                liabilities
            
            $
            441,632
            
            $
            489,328Equity
            
            
            22,110,750
            
            
            23,340,014$
            22,552,382
            
            $
            23,829,342




Three Months
              Ended
            
            Three Months
              Ended
            
            Six Months
              Ended
            
            Six months
              EndedAugust 31,2007
            
            August 31,2006
            
            August 31,2007
            
            August 31,2006Net
                loss from operations
            
            $
            (625,770
            )
            $
            (1,015,086
            )
            $
            (1,582,402
            )
            $
            (2,274,929
            )




**LINE
      OF CREDIT AGREEMENTS:**




On
      May
      27, 2005, we entered into a Line of Credit Agreement with Biomed Solutions,
      LLC,
      a related party, whereby Biomed agreed to provide a line of credit facility
      of
      up to $2 million. Borrowings under the line, bear interest at 8% per annum,
      are
      payable on demand and are convertible at Biomed's election, into the Company's
      common stock at 90% of the average closing price for the 20 trading days
      preceding the date of borrowings under the line. In June 2005, the Company
      borrowed the entire $2 million under the line in two separate draws of $1
      million each. In accordance with the agreement, Biomed received warrants to
      purchase 500,000 shares of the Company's common stock at an exercise price
      of
      110% of the average closing price for the 20 trading days preceding the date
      of
      execution of the credit agreement. The Company recorded a discount on the
      borrowings of $958,160 due to the beneficial conversion feature of the note
      as
      well as for the value of the warrants. The discount was amortized as additional
      interest expense over the term of the note. In August 2005, Biomed elected
      to
      convert $1 million of the note plus accrued interest into 480,899 shares of
      common stock at which time, the remaining discount related to the $1 million
      portion of the loan was fully expensed. On October 7, 2005, we repaid $500,000
      of principal and all accrued interest on the loan. The balance of borrowings
      on
      the line was $500,000 at August 31, 2007.




On
      January 24, 2006, we entered into an additional Line of Credit Agreement (the
      "Line of Credit Agreement") with Biomed Solutions, LLC, pursuant to which Biomed
      committed to make advances to us, in an aggregate amount of up to $5,000,000.
      Under the Line of Credit Agreement, advances may be drawn down in such amounts
      and at such times as we determine upon 15 days prior notice to Biomed, except
      that we may not draw down more than $1,500,000 in any 30-day period. Amounts
      borrowed bear interest at the rate of 8% per annum and were convertible into
      shares of our Common Stock at the rate of $1.46 per share. Biomed's obligation
      to lend to us under the Line of Credit Agreement expires on June 30, 2007,
      on
      which date the entire amount borrowed by us (and not converted into shares
      of
      our Common Stock) becomes due and payable. In connection with the establishment
      of the credit facility, we issued to Biomed a warrant to purchase up to
      1,198,630 shares of our Common Stock at an exercise price of $1.89 per share.
      The Company recorded a discount on the borrowings of $1,678,425 due to the
      beneficial conversion feature of the note as well as for the value of the
      warrant.




On
      October 11, 2006, in connection with our Securities Purchase Agreement dated
      October 11, 2006 with Iroquois Master Fund Ltd and other private investors
      (the
      "Purchase Agreement"), we amended our January 24, 2006 Line of Credit Agreement
      (the "Biomed Line of Credit Agreement") with Biomed and the Convertible
      Promissory Note in the original principal amount of $5,000,000 issued by us
      to
      Biomed on January 24, 2006 pursuant to the Biomed Line of Credit Agreement
      (the
      "$5,000,000 Biomed Note"). The amendment reduced the price at which the
      $5,000,000 Biomed Note is convertible into shares of our Common Stock from
      $1.46
      per share to a conversion price of $0.67. In connection with the Purchase
      Agreement, we also entered into a Subordination and Standstill Agreement (the
      "Subordination Agreement") with Biomed and the investors who are parties to
      the
      Purchase Agreement, pursuant to which Biomed agreed (i) to subordinate its
      rights to payment under the $5,000,000 Biomed Note and the Convertible
      Promissory Note in the original principal amount of $2,000,000 issued by us
      to
      Biomed on May 27, 2005 to the rights of the investors under the Notes and (ii)
      to convert the entire outstanding amount of principal and interest due under
      the
      $5,000,000 Biomed Note in excess of $700,000 into shares of our common stock
      upon the effectiveness of an amendment to our Articles of Incorporation to
      increase the number of our authorized shares which was effective May 9, 2007.
      On
      July 19, 2007, Biomed converted $2,180,000 of principal and $195,899 of accrued
      interest into a total of 3,546,118 shares of our common stock leaving a balance
      outstanding at August 31, 2007 of $1,750,000.




The
      fair
      value of the notes is not readily determinable as there is a limited market
      for
      such related party debt.


8


**SENIOR
      SECURED CONVERTIBLE NOTES:**




On
      October 11, 2006, we entered into a Securities Purchase Agreement (the "Purchase
      Agreement") with 10 private investors led by Iroquois Master Fund Ltd
      ("Iroquois"). Pursuant to the Purchase Agreement, on October 12, 2006 we issued
      $7,250,000 of Senior Secured Convertible Notes (the "Notes") to the investors
      and received proceeds of $6,219,880 after paying estimated fees and expenses
      of
      $1,030,120 related to the transaction. The holders of the Notes may elect to
      convert the Notes at any time into shares of our common stock based upon a
      price
      of $0.67 per share (the "Conversion Price"). Interest on the outstanding
      principal amount under the Notes is payable quarterly at a rate equal to the
      six-month London InterBank Overnight Rate plus 500 basis points, with a minimum
      rate of 10% per annum and a maximum rate of 12% per annum, payable at our option
      in cash or shares of our common stock registered for resale under the Securities
      Act of 1933, as amended (the "Securities Act"). If we elect to make an interest
      payment in common stock, the number of shares issuable by us will be based
      upon
      the lower of (i) 90% of the 20-day trailing average volume weighted average
      price per share as reported on Bloomberg LP (the "VWAPS") or (ii) the Conversion
      Price. Principal on the Notes amortizes and payments are due in 33 equal monthly
      installments commencing four months following issuance of the Notes, and may
      be
      made at our option in cash or shares of our common stock registered for resale
      under the Securities Act. If we elect to make a principal payment in common
      stock, the number of shares issuable by us will be based upon the lower of
      (i)
      87.5% of the 15-day trailing VWAPS prior to the principal payment date or (ii)
      the Conversion Price. Our obligations under the Notes are secured by a first
      priority security interest in substantially all of our assets pursuant to a
      Security Agreement dated as of October 11, 2006 among us, the investors and
      Iroquois, as agent for the investors (the "Security Agreement").




As
      further consideration to the investors, we issued to the investors one-year
      warrants to purchase an aggregate of 10,820,896 shares of our common stock
      at a
      price of $0.67 per share. If the investors elect to exercise these one-year
      warrants, they will also receive additional five-year warrants to purchase
      the
      shares of our common stock equal to the number of shares purchased under the
      one-year warrants, with 50% of the additional warrants having an exercise price
      of 115% of the per share purchase price, and the remaining 50% of the additional
      five-year warrants having an exercise price of 125% of the per share purchase
      price. We also issued to the investors five-year warrants to purchase an
      aggregate of 10,820,896 shares of our common stock. The first five-year warrants
      allow for the purchase of 5,410,448 shares of our common stock at an exercise
      price of $0.81 per share, and the second five-year warrants allow for the
      purchase of 5,410,448 shares of our common stock at an exercise price of $0.89
      per share. The warrants contain anti-dilution protection that, should we issue
      equity or equity-linked securities at a price per common share below the
      exercise price of the five-year warrants, it will automatically adjust the
      exercise price of the warrants to the price at which we issue such equity or
      equity-linked securities. The total fair value of the warrants was $14,554,105.
      The Company recorded a discount on the Notes of $7,250,000 for the fair value
      of
      the related warrants. The excess of the fair value of the warrants over the
      carrying value of the notes, which amounted to $7,304,105, was recognized as
      additional expense related to warrants in the statement of operations for the
      year ended February 28, 2007. The discount on the Notes is being amortized
      over
      the life of the Notes using the effective interest method. The discount
      amortization for the three months and six months ended August 31, 2007 amounted
      to $905,197 and $1,910,971_respectively, and is included in interest expense
      in
      the accompanying statements of operations.




We
      further agreed to register for resale under the Securities Act the common stock
      issuable upon the exercise of the warrants and any shares of common stock we
      may
      issue to the holders of the Notes in connection with payments of interest and
      principal, or which we are obligated to issue upon any conversion of the Notes
      at the option of the holders. Because we were unable to comply with various
      provisions of the registration requirements of the Purchase Agreement we
      incurred liquidated damages amounting to $652,500 that have been accrued and
      was
      charged to operations during the three months ended May 31, 2007.




On
      February 21, 2007, we entered into a Forbearance Agreement (the "Forbearance
      Agreement") with the investors pursuant to which the investors agreed that,
      during the period commencing on February 16, 2007 and ending on the earlier
      of(i) March 31, 2007 or (ii) the date on which any Termination Event (as defined
      in the Forbearance Agreement) first occurs (the "Forbearance Period"), they
      will
      forbear from exercising any and all of the rights and remedies which they may
      have against us or any of our assets under the Notes or the Purchase Agreement
      or at law or in equity as a result of any default under the Notes or as a result
      of the occurrence of certain events with respect to the Purchase Agreement.
      In
      exchange for entering into the Forbearance Agreement, we issued pro rata to
      the
      investors three-year warrants for the purchase of an aggregate of 60,000 shares
      of our common stock at an exercise price of $0.51 per share (the "Fee
      Warrants").




Upon
      the
      issuance of the Fee Warrants, the exercise prices of the five-year warrants
      issued to the investors pursuant to the Purchase Agreement (the "Original
      Warrants") for the purchase of an aggregate of 10,820,896 shares of our common
      stock were automatically adjusted from $0.81 per share and $0.89 per share,
      respectively, to $0.51 per share, and the number of shares of our common stock
      issuable upon exercise of the Original Warrants was automatically adjusted,
      proportionately, to an aggregate of 18,034,830 shares. In the Forbearance
      Agreement, the investors waived, with respect to the issuance of the Fee
      Warrants, application of similar anti-dilution adjustments contained in the
      Notes and in a third series of warrants for the purchase, on or before October
      12, 2007, of an aggregate of 10,820,896 additional shares of our common stock
      at
      an exercise price of $0.67 per share (the "One Year Warrants"). C.E. Unterberg
      Towbin, which holds a warrant for the purchase of 865,672 shares of our common
      stock at an exercise price of $0.67 per share, issued to it in connection with
      its services as exclusive placement agent under the Purchase Agreement,
      separately agreed to waive, with respect to the issuance of the Fee Warrants,
      application of the anti-dilution provisions set forth in that warrant. Because
      the anti-dilution adjustment to the Original Warrants is accounted for as a
      modification of the Original Warrants, we recorded an expense for this
      modification in the period ended February 28, 2007.


9







On
      October 3, 2007, we entered into Amendment No. 1 to the Securities Purchase
      Agreement, Senior Secured Convertible Notes, Warrants and Security Agreement
      with the independent private investors. Pursuant to the Amendment, we agreed
      to
      amend the Notes to provide that even if the we elect to make a monthly
      installment payment in cash, the holder will have the right to convert any
      portion of the Note into common stock of the Company and apply the number of
      shares the holder would have received had we elected to make payment in common
      stock. In addition, the Conversion Price was reduced to $0.15. The Amendment
      also amended the warrants to reduce the exercise prices of the various warrants
      to $0.23. In exchange for the foregoing, the investors released certain
      intellectual property for the Security Agreement, allowing the Company to
      transfer and sell such intellectual property. Further, in the Amendment, we
      agreed to certain spending covenants in connection with the proceeds we will
      receive from the sale of the intellectual property under the Intellectual
      Property Assignment Agreement dated as of August 6, 2007 by and between Biophan
      and Medtronic, Inc.





**FAIR
      VALUE OF WARRANT LIABILITY:**




In
      accordance with the guidance provided by EITF 00-19, Accounting for Derivative
      Financial Instruments Indexed to and Potentially Settled in, a Company's Own
      Stock, we recorded a liability of $10,157,937 for the fair value of the warrants
      related to the Senior Secured Convertible Notes at February 28, 2007 in order
      to
      provide for the possibility that we would not be able to comply with the
      registration rights of the lenders as contained in the Securities Purchase
      Agreement because we did not have sufficient available authorized shares to
      execute a potential conversion of the Notes and related warrants and thus we
      would be required to settle the contract in cash. In addition, since we did
      not
      have sufficient available authorized shares to execute a potential conversion
      of
      other outstanding warrants, if requested to do so by the grantees, we could
      be
      required to settle any conversion requests in cash. Therefore, we reclassified
      warrants with an approximate value of $756,000 from equity to the warrant
      liability. The fair value of this amount was $336,069 at February 28, 2007.
      The
      Company obtained stockholder approval to increase the authorized shares at
      a
      Special Meeting held on May 8, 2007. The total fair value of derivative
      liability, recorded at $10,494,006 at February 28, 2007, was adjusted by
      $4,339,214 to $6,154,792 at May 8, 2007 resulting in a net non-cash income
      adjustment of that amount. The balance of the liability was then reclassified
      to
      additional paid-in capital.




**STOCKHOLDERS'
      EQUITY:**




The
      following changes in stockholders equity took place during the six months ended
      August 31, 2007:


Event
              
              Number
                of
                  Shares
                Issued
              
              Common
                  Stock
              
              Additional
                  Paid-in CapitalBalance
                  at February 28, 2007
              
              83,431,699
              
              $
              417,159
              
              $
              54,532,204Fair
                  value of derivative liability
              
              
              
              
              
              
              
              6,154,792Stock
                  option expense
              
              
              
              
              
              
              
              347,643Balance
                  at May 31, 2007
              
              83,431,699
              
              
              417,159
              
              
              61,034,639Conversion
                  of Biomed loan principal and accrued interest
              
              3,546,118
              
              
              17,730
              
              
              2,358,169Principal
                  and interest payments to investors
              
              10,893,013
              
              
              54,465
              
              
              1,734,896Stock
                  issued for services
              
              504,859
              
              
              2,524
              
              
              76,705Additional
                  equity contribution from other Myotech members
              
              
              
              
              
              
              
              40,049Stock
                  option expense
              
              
              
              
              
              
              
              1,596,986Balance
                  at August 31, 2007
              
              98,375,689
              
              $
              491,878
              
              $
              66,841,444




10




On
      May 8,
      2007, at a Special Meeting of Stockholders, a proposal to increase the
      authorized shares of common stock, $.005 par value, from 125 million to 250
      million was approved by the stockholders. As a result, additional paid-in
      capital was increased by $6,154,792 due to the elimination of the fair value
      of
      warrant liability as of the date of the stockholder approval. In June 2007,
      principal and interest payments to holders of the Senior Secured Convertible
      Notes commenced.




11


**SHARE-BASED
      COMPENSATION PLANS:**




The
      Company has two stock-based compensation plans, entitled Biophan Technologies,
      Inc. 2001 Stock Option Plan and Biophan Technologies, Inc. 2006 Incentive Stock
      Plan (the "Plans") which are stockholder approved. The Plans provide for the
      grant of incentive and non-qualified stock options to selected employees, and
      the grant of non-qualified options to selected consultants and to directors
      and
      advisory board members. In addition, various other types of stock-based awards
      may be granted. The Plans are administered by the Compensation Committee of
      the
      Board and authorizes the grant of options or restricted stock awards for
      13,000,000 shares under the 2001 Plan and 7,500,000 shares under the 2006 Plan.
      The Compensation Committee determines which eligible individuals are to receive
      options or other awards under the Plans, the terms and conditions of those
      awards, the applicable vesting schedule, the option price and term for any
      granted options, and all other terms and conditions governing the option grants
      and other awards made under the Option Plan. Non-employee directors also receive
      periodic option grants pursuant to the automatic grant program in effect for
      them under the 2006 Plan.




Effective
      March 1, 2006, the Company adopted SFAS No. 123 (revised), "Share-Based Payment"
      (SFAS 123(R)) utilizing the modified prospective approach. Prior to the adoption
      of SFAS 123(R), stock option grants to employees and directors were accounted
      for in accordance with APB Opinion No. 25, "Accounting for Stock Issued to
      Employees" (the intrinsic value method) and the disclosure-only provisions
      of
      SFAS 123, "Accounting for Stock-Based Compensation". Accordingly, employee
      compensation expense was recognized only to the extent that the fair value
      of
      our common stock on the date of grant exceeded the stock option exercise
      price.




Under
      the
      modified prospective approach, SFAS 123(R) applies to new grants and to grants
      that were outstanding on February 28, 2006 that are subsequently modified,
      repurchased or cancelled. Under the modified prospective approach, compensation
      cost recognized beginning in fiscal 2007 includes compensation cost for all
      share-based payments granted prior to, but not yet vested as of February 28,
      2006, based on the grant-date fair value estimated in accordance with the
      original provisions of SFAS 123, and compensation cost for all share-based
      payments granted subsequent to February 28, 2006, based on the grant-date fair
      value estimated in accordance with the provisions of SFAS 123(R). Prior periods
      were not restated to reflect the impact of adopting the new
      standard.




We
      use
      the Black-Scholes option pricing model to estimate the fair value of stock-based
      awards with the following assumptions for the indicated periods:


Three
              
              Three
              
              Six
              
              SixMonths
                  Ended
              
              Months
                  Ended
              
              Months
                  Ended
              
              Months
                  EndedAugust
                  31,
              
              August
                  31,
              
              August
                  31,
              
              August
                  31,2007
              
              2006
              
              2007
              
              2006Expected
                  volatility
              
              
              78.8
              
              
              119.7
              
              
              75.2-81.4
              
              
              119.7-121.8Risk-free
                  interest rate
              
              
              4.8
              %
              
              5.35
              %
              
              4.55%-4.8
              %
              
              4.6%-5.35
              %Expected
                  life of options 8 years
              
              
              8
                  years
              
              
              8
                  years
              
              
              4-8
                  yearsExpected
                  dividends
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-




The
      assumptions above are based on multiple factors, including historical exercise
      patterns of employees in relatively homogeneous groups with respect to exercise
      and post-vesting employment termination behaviors, expected future exercising
      patterns for these same homogeneous groups and the implied volatility of our
      stock price.




At
      August
      31, 2007, there was $722,440 of unrecognized compensation cost related to
      stock-based payments which is expected to be recognized over a weighted-average
      period of 1.11 years.




The
      following table represents stock option activity for the six months ended August
      31, 2007:


Weighted-Weighted-
              
              AverageNumber
              
              Average
              
              Remainingof
              
              Exercise
              
              ContractShares
              
              Price
              
              Life(years)Outstanding
                  options at 2/28/07
              
              
              9,428,062
              
              $
              .96Granted
              
              
              6,277,331
              
              $
              .22Exercised
              
              
              -0-Forfeited
              
              
              (631,500
              )
              $
              1.49Expired
              
              
              -0-Outstanding
                  options at 8/31/07
              
              
              15,073,893
              
              $
              .67
              
              
              7.72Outstanding
                  exercisable at 8/31/07
              
              
              13,718,060
              
              $
              .59
              
              
              7.72




In
      addition to stock option grants of 6,162,331 during the three months ended
      August 31, 2007, grants of common stock aggregating 504,859 shares were awarded
      to certain individuals pursuant to the 2006 Incentive Stock Plan.




12




At
      August
      31, 2007, shares available for future stock option grants and other stock-based
      awards to employees and others under our 2001 Stock Option Plan were
      1,189,481and shares available for future stock option grants and other
      stock-based to employees and others under our 2006 Incentive Stock Plan were
      522,833.




At
      August
      31, 2007, the aggregate intrinsic value of shares outstanding was $20,000,
      and
      the aggregate intrinsic value of options exercisable was $20,000. No options
      were exercised during the six months ended August 31, 2007.




The
      following table summarizes our non-vested stock option activity for the six
      months ended August 31, 2007:


Weighted-AverageNumber
                  of
              
              Grant-Date
                  FairShares
              
              ValueNon-vested
                  stock options at 2/28/07
              
              
              1,994,583
              
              $
              .62Granted
              
              
              6,277,331
              
              $
              .22Vested
              
              
              (6,454,831
              )
              $
              .26Forfeited
              
              
              (461,250
              )
              $
              .50Non-vested
                  stock options at 8/31/07
              
              
              1,355,833
              
              $
              .66




**CONTINGENCIES:**




We
      are
      not a party to any material legal proceedings and there are no material legal
      proceedings pending with respect to our property, except as noted below. We
      are
      not aware of any legal proceedings contemplated by any governmental authorities
      involving either us or our property. None of our directors, officers or
      affiliates is an adverse party in any legal proceedings involving us or our
      subsidiaries, or has an interest in any proceeding which is adverse to us or
      our
      subsidiaries.




The
      Company is pursuing legal claims against one of its former law firms and certain
      of its attorneys. Review of the firm's work product and bills revealed questions
      about the firm's billing practices and other activities. The amount of potential
      damages has not yet been quantified. Also, the law firm has asserted claims
      seeking payment of additional legal fees, which claims the Company has denied.
      The litigation is in an early stage. While, as with any legal proceedings,
      no
      assurance can be given as to ultimate outcome, management believes that the
      outcome of the litigation will not have a material adverse effect upon the
      Company's financial condition. Accordingly, adjustments, if any that might
      result from the resolution of this matter have not been reflected in the
      financial statements.




On
      April
      5, 2007, SBI Brightline LLC and SBI Brightline XI, LLC brought suit against
      us
      and Biomed Solutions, LLC in the Superior Court of Orange County, California.
      The suit alleges, among other things, that in September 2006 we entered into
      an
      agreement to terminate the Stock Purchase Agreement dated as of May 27, 2005
      and
      amended on January 8, 2006, between us and SBI Brightline XI, LLC, and seeks
      unspecified monetary damages and an order by the Court deeming the Stock
      Purchase Agreement to be terminated. We believe the allegations made by SBI
      are
      without basis in fact and in response moved for dismissal of the complaint.
      The
      plaintiffs withdrew their complaint following our motion and filed an amended
      complaint containing nearly identical allegations. We intend to continue to
      defend the law suit vigorously, including seeking dismissal of the amended
      complaint. Because of the potential costs of litigation and the anticipated
      demands that our defense may place on the time and attention of our management
      our defense of this matter, regardless of the outcome, could have a material
      adverse effect on our business and operations.




**SUBSEQUENT
      EVENT:**





On
      August
      6, 2007, we entered into an Intellectual Property Assignment Agreement with
      Medtronic, Inc., a Minnesota corporation, pursuant to which we agreed to
      transfer and sell to Medtronic all of our interest in and to certain
      intellectual property owned by us for an aggregate purchase price of
      $11,000,000, which amount would have been reduced to $10,500,000 if the closing
      did not occur within 60 days of the execution of the agreement. On October
      5,
      2007, we closed the transaction contemplated by the Intellectual Property
      Assignment Agreement, sold the foregoing intellectual property to Medtronic
      and
      received an aggregate of $11,000,000 as the sale price.




13




**MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS**




**GENERAL**




Our
      primary mission is to develop and commercially exploit technologies for
      improving the performance, and the corresponding competitiveness, of biomedical
      devices manufactured by third party companies. We do not currently employ our
      own manufacturing or distribution channels but rather rely on relationships
      with
      sub-contractors and/or partner companies. We develop technology protected by
      strong intellectual property targeted at specific markets within the medical
      technology sector.




**COMPANY
      BUSINESS**




During
      the three-month period ended August 31, 2007, we have accomplished the
      following:




· On
          August
          6, we initiated an agreement to sell a subset of our intellectual property
          portfolio to Medtronic for $11 million. The portion that was sold is limited
          to
          technologies covering MRI safety of implantable devices such as pacemakers
          and
          neurostimulators. We received $500,000 upon execution on August 6, $500,000
          on
          September 6 and the balance of the $11 million was paid upon closing on
          October
          5. Under this agreement, we maintain our license with Boston Scientific,
          including the $250,000 annual minimum payments, as well as any royalties
          for
          vascular implants such as stents, as well as MRI visible devices such as
          catheters and guidewires.




· We
      have continued collaboration
      with Myotech, LLC on development of the Myotech Circulatory Support System
      (CSS), a life-saving device that provides benefits and competitive advantages
      not possible with other circulatory support devices. In the past, first
      generation prototype versions of this technology (Direct Mechanical Ventricular
      Actuation) has saved human lives and holds tremendous promise of the treatment
      of acute heart failure. On October 5, 2007, we announced a new agreement with
      Myotech putting Biophan in control of Myotech, increasing our ownership to
      68
      percent, from 44 percent prior to the deal, in exchange for $1.2 million in
      funding. Upon achieving certain milestones, Biophan will commit an additional
      $2
      million in funding in exchange for additional equity.




· We
      recognized $160,018 in
      revenue from licensing, grants, MRI testing, and consulting fees.




· We
      have continued development of
      an MRI image compatible stent, capable of being imaged with MRI to detect the
      presence of restenosis (blood vessel narrowing) and blood clots after
      implantation. We are also developing an MRI visible heart valve, including
      the
      ability to place the valve under MRI guidance, which provides significant
      advantages over existing imaging procedures. Our technologies to enable stent
      and heart valve visibility are licensed exclusively to Boston Scientific
      (NYSE:BSX).




· We
      have continued development of
      an MRI image compatible vena cava filter, which allows MR imaging of blood
      clots
      that may be present in the filter to help ensure the safe removal of the device.
      We are also developing a septal occluder device that can also be imaged and
      implanted under MRI guidance to treat conditions such as PFO (patent foramen
      ovale) and atrial septal defects, the latter being a hole in the septum between
      the left and right atria in the heart. This will be the first septal occluder
      to
      be visible as well as implantable under MRI.




· Continued
      working under a
      Cooperative Research and Development Agreement (CRADA) with the FDA's Office
      of
      Science and Engineering Laboratories (OSEL) to research and define methods
      for
      measuring MRI safety of medical implants by examining the leads of cardiac
      rhythm management and neurostimulation devices.




We
      have
      determined that the technology that we control which is the most proven and
      most
      likely to produce revenues within the near term is the Myotech CSS. This
      technology is our primary areas of focus. Work on MRI visibility is centered
      in
      Europe in our Biophan Europe subsidiary.




Other
      programs, such as the biothermal power supply that we have been developing
      with
      NASA, will take longer to develop, and we have decided to fund these projects
      through either government grants, strategic partners, or other structures that
      do not divert focus and resources from our short-term goals of capitalizing
      on
      our core business field.




The
      work
      done to date at NASA on the biothermal power supply has indicated that it may
      require an additional 18 months to determine if we can develop a significant
      improvement in performance of thermoelectric materials over the current state
      of
      the art, adequate to generate power from the available heat in the human body.
      We have secured one SBIR Phase 1 grant from the Department of Homeland Security,
      and another from the Department of Energy, for the development of the biothermal
      power supply, and we are pursuing additional grant and matching fund
      opportunities with other Federal agencies.




14




**RESULTS
      OF OPERATIONS**




The
      following table presents the dollar amount and percentage of changes from period
      to period of the line-items included in our Condensed Consolidated Statements
      of
      Operations:




**Three
                  Months Ended**
              
              
              
              
              
              **Six
                  Months Ended****August
                  31,**
              
              **Incr.**
              
              
              
              **August
                  31,**
              
              **Incr.****2007**
              
              **2006**
              
              **(Decr.)**
              
              **%
                  change**
              
              **2007**
              
              **2006**
              
              **(Decr.)**
              
              **%
                  change**Revenues
              
              $
              160,018
              
              $
              310,099
              
              $
              (150,081
              )
              
              (48.40
              )%
              $
              332,351
              
              
              655,021
                  $
              
              $
              (322,670
              )
              
              (49.26
              )%Operating
                  expenses:Research
                  and development
              
              
              1,497,837
              
              
              1,941,513
              
              
              (443,676
              )
              
              (22.85
              )%
              
              2,817,784
              
              
              4,529,921
              
              
              (1,712,137
              )
              
              (37.80
              )%General
                  and administrative
              
              
              1,802,753
              
              
              1,573,434
              
              
              229,319
              
              
              14.57
              %
              
              3,290,423
              
              
              3,659,625
              
              
              (369,202
              )
              
              (10.09
              )%Total
                  Expenses
              
              
              3,300,590
              
              
              3,514,947
              
              
              (214,357
              )
              
              (6.10
              )%
              
              6,108,207
              
              
              8,189,546
              
              
              (2,081,339
              )
              
              (25.41
              )%Operating
                  loss
              
              
              (3,140,572
              )
              
              (3,204,848
              )
              
              64,276
              
              
              (2.01
              )%
              
              (5,775,856
              )
              
              (7,534,525
              )
              
              1,758,669
              
              
              (23.34
              )%Other
                  income (expense)
              
              
              (1,026,255
              )
              
              (329,508
              )
              
              (696,747
              )
              
              211.45
              %
              
              1,319,175
              
              
              (579,100
              )
              
              1,898,275
              
              
              (327.80
              )%Loss
                  from continuing operations before minority interest in Myotech,
                  LLC
              
              
              (4,166,827
              )
              
              (3,534,356
              )
              
              (632,471
              )
              
              17.89
              %
              
              (4,456,681
              )
              
              (8,113,625
              )
              
              3,656,944
              
              
              (45.07
              )%Minority
                  interest in Myotech, LLC
              
              
              253,354
              
              
              520,095
              
              
              (266,741
              )
              
              (51.29
              )%
              
              725,173
              
              
              1,215,920
              
              
              (490,747
              )
              
              (40.36
              )%Net
                  loss
              
              $
              (3,913,473
              )
              $
              (3,014,261
              )
              $
              (899,212
              )
              
              29.83
              %
              $
              (3,731,508
              )
              $
              (6,897,705
              )
              $
              3,166,197
              
              
              (45.90
              )%




The
      following comments discuss the significant factors affecting the consolidated
      operating results of the Company comparing the three months ended August 31,
      2007 to the three months ended August 31, 2006 and the six months ended August
      31, 2007 to the six months ended August 31, 2006.




**Comparison
        of the Three Months Ended August 31, 2007 to the Three Months Ended August
        31,
        2006.**
  **Revenues** **:**
 Revenues
        were $160,018 for the three months ended August 31, 2007 as compared to $310,099
        for the three months ended August 31, 2006. The decrease was due principally
        to
        the agreed-upon schedule of license fee payments and amortization thereof
        from
        Boston Scientific Scimed ($125,000) and decreased operating revenues from
        our
        European subsidiary, which consisted primarily of MRI-related testing and
        consulting services to medical device manufacturers ($50,000).
  **Research
        and Development Expenses** **:**
 Research
        and development expenses decreased by 23%, or $444,000. After factoring out an
        increase in non-cash charges relating to stock options expense ($450,000)
        however, expenses decreased by 894,000, 51%. The
        decrease is attributable generally to our planned reductions in spending
        on our
        research and development projects, due to restructuring. The major areas
        of
        decreased expenses were Project Funding ($580,000), Consulting ($180,000),
        and
        Personnel ($116,000).
  **General
        and Administrative Expenses** **:**
 General
        and administrative expenses increased by 15%, or $229,000. After factoring
        out
        an increase in non-cash charges relating to stock options expense ($889,000)
        However, other expenses decreased by $660,000, or 35%. The decrease is
        attributable generally to our planned reductions in spending, due to
        restructuring. The major areas of decreased expenses were Public Relations
        ($263,000), Personnel ($117,000), Travel ($76,000), Shareholder Expenses
        ($74,000), Office Supply and Expense ($56,000) and Consulting and Outside
        Services ($43,000).
  **Other
        income (expense)** **:**
 The
        major
        component of this category is interest expense, accounting for $1,234,622
        of a
        net total of $1,026,255 for the three months ended August 31, 2007 compared
        with
        $380,934 of a net total of $329,508 for the three months ended August 31,
        2006.
        Interest expense increased by $853,688. The major areas attributable to the
        increase were due to interest ($180,000), and discount ($905,000) related
        to the
        Senior Secured Convertible Notes and a decrease in interest ($359,000) related
        to the reduction of the Biomed Line of Credit.
 
 **Minority
        Interest in Myotech LLC** **:**
 The
        increase in this line-item is a direct effect of allocating the losses incurred
        by Myotech to the interest of the owners of Myotech other than Biophan.


15




**Comparison
        of the Six Months Ended August 31, 2007 to the Six Months Ended August 31,
        2006**
  **Revenues** **:**
 Revenues
        were $332,351 for the six months ended August 31, 2007 as compared to $655,021
        for the six months ended August 31, 2006. The decrease was due principally
        to
        the agreed-upon schedule of license fee payments and amortization thereof
        from
        Boston Scientific Scimed ($315,500) and decreased operating revenues from
        our
        European subsidiary, which consisted primarily of MRI-related testing and
        consulting services to medical device manufacturers ($82,000). There was
        also an
        increase in Grant revenues ($75,000).
  **Research
        and Development Expenses** **:**
 Research
        and development expenses decreased by 38%, or $1,712,137. After factoring
        out an
        increase in non-cash charges relating to stock options expense ($267,000)
        however, expenses decreased by $2,162,000, 49%. The decrease is attributable
        generally to our planned reductions in spending on our research and development
        projects, due to restructuring. The major areas of decreased expenses were
        Project Funding ($1,360,000), Consulting ($432,000), and Personnel
        ($127,000).
 .
  **General
        and Administrative Expenses** **:**
 General
        and administrative expenses decreased by 10%, or $369,202. After factoring
        out
        an increase in non-cash charges relating to stock options expense ($889,000)
        However, other expenses decreased by 1,258,000, or 36%. The decrease is
        attributable generally to our planned reductions in spending, due to
        restructuring. The major areas of decreased expenses were Public Relations
        ($678,000), Personnel ($128,000), Travel ($100,000), Shareholder Expenses
        ($70,000), Legal fees ($142,000), Office Supply and Expense ($44,000), and
        Consulting and Outside Services ($241,000). Also, there was an increase in
        Accounting fees ($202,000).
 
 **Other
        income (expense)** **:**
 The
        major
        component of this category is interest expense, accounting for $1,714,326
        of a
        net other income of $1,319,175 for the six months ended August 31, 2007 compared
        with $684,407 of a net other expense of $579,100 for the six months ended
        August
        31, 2006. The major areas attributable to the increase were due to interest
        ($342,000), discount ($1,910,000), and a decrease in change in fair value
        of
        derivative liability ($4,339,000) related to the Senior Secured Convertible
        Notes and a decrease in interest ($570,000) related to the reduction of the
        Biomed Line of Credit. Other items attributable to the increase in net other
        income is the change in the fair value of warrant liability ($3,434,000)
        and a
        decrease due to liquidated damages ($652,500).




**LIQUIDITY
      AND CAPITAL RESOURCES**




*Liquidity*




As
      of the
      date of our previous Quarterly Report on Form 10-Q, we disclosed and discussed
      certain information pertaining to our ability to continue as a going concern.
      We
      have been in the development stage since inception, incurring recurring losses
      from operations and, as of August 31, 2007, the Company's current liabilities
      exceeded its current assets by $6,123,921. In addition, as of August 31, 2007,
      we were in default of our obligations to make payments of principal, interest
      and liquidated damages to holders of our Senior Secured Convertible Notes.
      These
      factors raise potential doubt about the Company's ability to continue as a
      going
      concern.





However,
      on October 3, 2007, we entered into Amendment No. 1 to the Securities Purchase
      Agreement, Senior Secured Convertible Notes, Warrants and Security Agreement
      with the independent private investors. Pursuant to the Amendment and related
      agreements, the aforementioned defaults were cured. In addition, the investors
      released certain intellectual property for the Security Agreement, allowing
      the
      Company to transfer and sell certain intellectual property to Medtronic, Inc..
      Further, in the Amendment, we agreed to certain spending covenants in connection
      with the proceeds we will received from the sale of the intellectual property
      under the Intellectual Property Assignment Agreement dated as of August 6,
      2007
      by and between Biophan and Medtronic. On October 5, 2007, we closed the
      transaction contemplated by the Intellectual Property Assignment Agreement,
      sold
      the foregoing intellectual property to Medtronic and received an aggregate
      of
      $11,000,000 as the sale price.




In
      order
      to further address the current liquidity situation, management has instituted
      a
      cost reduction program that includes a reduction in quarterly operating expenses
      from approximately $1,950,000 at this time last year to a cap of $600,000 per
      quarter currently. In addition, the Company has reduced its investments in
      several product lines and pursued alternative funding vehicles in support of
      other projects.





We
      have
      also reorganized our efforts on funding the development of the Myotech Cardiac
      Support System device. On October 2, 2007, we entered into a revised Securities
      Purchase Agreement with Myotech, LLC in which we hold a 44% interest as of
      August 31, 2007. Pursuant to the Agreement, we agreed to purchase from Myotech
      an aggregate of 15,496,547 membership units for an aggregate purchase price
      of
      $3,200,000. In accordance with the Agreement, we received an additional
      5,000,000 Class A Membership Units and an additional 4,316,547 Class A
      Membership Units upon the payment of an aggregate initial purchase price of
      $1,200,000. Thereafter, upon the satisfaction of certain conditions, Biophan
      will purchase an additional 6,180,000 Class A Membership Units of Myotech for
      a
      purchase price of $2,000,000. As a result of these investments, our ownership
      percentage in Myotech will increase to approximately 75%.




16




The
      proceeds from the sale of intellectual property rights to Medtronic, along
      with
      the receipt in December 2007 of our third $250,000 annual minimum payment under
      our license agreement with Boston Scientific, will provide adequate working
      capital resources for the funding of the Myotech device development and other
      operations for an estimated twenty-six months.




***Capital
      Resources***




Our
      current strategic plan does not indicate a need for material capital
      expenditures in the conduct of research and development activities.





We
      currently employ fourteen full-time individuals, twelve in the U.S. and two
      in
      Europe.




**FORWARD
      LOOKING STATEMENTS**




Forward
      looking statements in this Form 10-Q and in other documents incorporated herein,
      as well as in oral statements made by the Company, statements that are prefaced
      with the words "may," "will," "expect," "anticipate," "continue," "estimate,"
      "project," "intend," "designed" and similar expressions, are intended to
      identify forward-looking statements regarding events, conditions, and financial
      trends that may affect the Company's future plans of operations, business
      strategy, results of operations and financial position. These statements are
      based on the Company's current expectations and estimates as to prospective
      events and circumstances about which the Company can give no firm assurance.
      Further, any forward-looking statement speaks only as of the date on which
      such
      statement is made, and the Company undertakes no obligation to update any
      forward-looking statement to reflect subsequent events or circumstances.
      Forward-looking statements should not be relied upon as a prediction of actual
      future financial condition or results. These forward-looking statements, like
      any forward-looking statements, involve risks and uncertainties that could
      cause
      actual results to differ materially from those projected or
      unanticipated.




**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**




**Derivative
      Financial Instruments, Other Financial Instruments, and Derivative Commodity
      Instruments**




As
      of
      August 31, 2007, the Company did not participate in any derivative financial
      instruments, or other financial and commodity instruments for which fair value
      disclosure would be required under SFAS No. 107.




**Primary
      Market Risk Exposures**




The
      Company's primary market risk exposures are in the areas of interest rate risk
      and foreign currency exchange rate risk. The Company's investment portfolio
      of
      cash equivalents is subject to interest rate fluctuations, but the Company
      believes this risk is immaterial due to the short-term nature of these
      investments. For the three and six months ended August 31, 2007, foreign
      currency translation gains were approximately $1,594 and $2,900 respectively,
      as
      a result of consolidating the Company's foreign subsidiaries. During the
      periods, the Company did not engage in any foreign currency hedging
      activities.




**ITEM
      4. CONTROLS AND PROCEDURES**




Based
      on
      their evaluation as of the end of the period covered by this quarterly report
      on
      Form 10-Q, our principal executive officer and principal financial officer,
      with
      the participation and assistance of our management, concluded that our
      disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated
      under the Securities Exchange Act of 1934, were effective in design and
      operation. There have been no changes in our system of internal control over
      financial reporting in connection with the evaluation by our principal executive
      officer and principal financial officer during our fiscal quarter ended August
      31, 2007 that have materially affected, or are reasonably likely to materially
      affect, our internal control over financial reporting.




**PART
      II. OTHER INFORMATION**




**ITEM
      1. LEGAL PROCEEDINGS**




Except
      as
      noted below, we are not a party to any material legal proceedings and there
      are
      no material legal proceedings pending with respect to our property, except
      as
      noted below. We are not aware of any legal proceedings contemplated by any
      governmental authorities involving either us or our property. None of our
      directors, officers or affiliates is an adverse party in any legal proceedings
      involving us or our subsidiaries, or has an interest in any proceeding which
      is
      adverse to us or our subsidiaries.




17




The
      Company is pursuing legal claims against one of its former law firms and certain
      of its attorneys. Review of the firm's work product and bills revealed questions
      about the firm's billing practices and other activities. The amount of potential
      damages has not yet been quantified. Also, the law firm has asserted claims
      seeking payment of additional legal fees, which claims the Company has denied.
      The litigation is in an early stage. While, as with any legal proceedings,
      no
      assurance can be given as to ultimate outcome, management believes that the
      outcome of the litigation will not have a material adverse effect upon the
      Company's financial condition. Accordingly, adjustments, if any that might
      result from the resolution of this matter have not been reflected in the
      financial statements.




On
      April
      5, 2007, SBI Brightline LLC and SBI Brightline XI, LLC brought suit against
      us
      and Biomed Solutions, LLC in the Superior Court of Orange County, California.
      The suit alleges, among other things, that in September 2006 we entered into
      an
      agreement to terminate the Stock Purchase Agreement dated as of May 27, 2005
      and
      amended on January 8, 2006, between us and SBI Brightline XI, LLC, and seeks
      unspecified monetary damages and an order by the Court deeming the Stock
      Purchase Agreement to be terminated. We believe the allegations made by SBI
      are
      without basis in fact and in response moved for dismissal of the complaint.
      The
      plaintiffs withdrew their complaint following our motion and filed an amended
      complaint containing nearly identical allegations. We intend to continue to
      defend the law suit vigorously, including seeking dismissal of the amended
      complaint. Because of the potential costs of litigation and the anticipated
      demands that our defense may place on the time and attention of our management
      our defense of this matter, regardless of the outcome, could have a material
      adverse effect on our business and operations.




**ITEM
      1A. RISK FACTORS**




There
      are
      no material changes from risk factors as previously disclosed in the Company's
      Form 10-K for the fiscal year ended February 28, 2007, Form S-1, Amendment
      No.
      4, dated May 24, 2007, Form S-8 dated August 9, 2007 and form S-8 dated
      September 4, 2007.




**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**




Not
      applicable.




**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**




In
        connection with our Securities Purchase Agreement dated October 11, 2006
        with
        Iroquois Master Fund Ltd and other private investors we are required to make
        scheduled payments of principal and interest. Beginning on December 1, 2006
        we
        were obligated to make quarterly interest payments and monthly payments of
        $219,697 principal. During the six months ended August 31, 2007, we made
        scheduled payments in stock but remained in technical default due to non-payment
        of past-due principal and liquidated damages of $652,500. However, on October
        3,
        2007, we entered into Amendment No. 1 to the Securities Purchase Agreement,
        Senior Secured Convertible Notes, Warrants and Security Agreement with the
        independent private investors. Pursuant to the Amendment and related agreements,
        the aforementioned defaults were cured.




**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




Not
      applicable.




**ITEM
      5. OTHER INFORMATION**




Not
      applicable.




**ITEM
      6. EXHIBITS**




Exhibit
                  No.
              
              Exhibit
                  Description
              
              Location31.1
              
              Certification
                  of principal executive officer pursuant to Rule 13a-14(a)
              
              Filed
                  herewith31.2
              
              Certification
                  of principal financial officer pursuant to Rule 13a-14(a)
              
              Filed
                  herewith32.1
              
              Certification
                  of principal executive officer pursuant to Rule 13a-14(b) and 18
                  U.S.C.
                  Section 1350
              
              Filed
                  herewith32.2
              
              Certification
                  of principal financial officer pursuant to Rule 13a-14(b) and 18
                  U.S.C.
                  Section 1350
              
              Filed
                  herewith


18


**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.


**BIOPHAN
                    TECHNOLOGIES, INC.**(Registrant)By:
                /s/
                    John F. LanzafameName:
                      John F. LanzafameTitle:
                      Chief Executive Officer(Principal
                    Executive Officer)By:
                /s/
                    Robert J. WoodName:
                      Robert J. WoodTitle:
                      Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer)Date:
                    October 10, 2007
  19